A significant difference between income from operations and net cash flows from operating activities is a signal that reported income might have been distorted.

Question

Quizplus · Accepted Answer

A significant difference between income from operations and net cash flows from operating activities can indicate that the company's reported income may not accurately reflect its cash flow. This difference can be caused by factors such as changes in working capital, non-cash expenses, and timing differences between when revenue is recognized and when cash is received. Therefore, it is important for investors and analysts to examine these differences when evaluating a company's financial statements.

A Significant Difference Between Income from Operations and Net Cash